PETALING JAYA: Malaysia Building Society Bhd (MBSB) is a step closer to transforming into a full-fledged Islamic banking outfit, announcing that it has submitted an application to Bank Negara for approvals for its proposed merger with Asian Finance Bank Bhd (AFB).
In a filing with Bursa Malaysia, the non-bank lender said that it “had submitted an application within the stipulated timeframe to seek Bank Negara and/or Finance Ministry’s approvals for the proposed merger.
“Further announcements shall be made upon receipt of the decision from Bank Negara,” it said.
On Dec 21, MBSB announced that it had received the central bank’s nod to begin negotiations with the Middle Eastern shareholders of AFB for a potential merger, confirming an earlier report by StarBiz that the two parties were in talks for a merger deal.
The central bank has allowed the parties six months, up to June 21, to conclude talks.
MBSB, whose single-largest shareholder is the Employees Provident Fund with a 65.4% stake, has been trying to transform into an Islamic bank in one way or another to increase its competitiveness.
Meanwhile, AFB’s shareholders are Qatar Islamic Bank (66.67%), RUSB Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain WLL (6.67%),
Last month, MBSB said that its proposed merger with AFB was on track with the only concern being valuation.
Its president and chief executive officer Datuk Ahmad Zaini Othman was reported as saying that the financial institution was in the midst of formulating reports and negotiating the valuations for the merger, and was more confident of seeing the merger go through this time because it is with a smaller financial institution.
The company’s latest merger bid comes on the back of two recent aborted deals.
Last year, Bank Muamalat Malaysia Bhd dropped a planned merger with MBSB, reportedly due to disagreements over valuation and control. Prior to that, MBSB was part of a failed three-way merger with CIMB Group Holdings Bhd and RHB Capital Bhd that was called off in January 2015.
Shares of MBSB closed one sen lower at RM1.32, giving it a market cap of RM7.64bil.
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